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Ch02(1)
 

Ch02(1)

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    Ch02(1) Ch02(1) Presentation Transcript

    • In this chapter you will: Define offer Identify the three conditions necessary to create a valid offer Explain the concept of certainty and definiteness in the terms of an offer List the four required terms in a valid offer Briefly discuss what is the UCC Discuss the impact of the UCC on traditional legal principles of a contractual offer Know what is meant by an output contract Apply basic concepts of an offer to contractual clauses Draft a basic offer that would meet legal standards Indicate the difference between contracting with a member of the general public and a merchant
    • An offer is a proposal by one party, the offeror, to a second party, the offeree, manifesting an intention to enter into a valid contract.
    • 1. The offeror must manifest a present contractual intent.2. The offer must be communicated to the offeree.3. The offer must be certain and definite with respect to its terms
    •  The element of intent is a basic requirement of all contractual relationships. Unlike other aspects of life and law, a contract cannot be thrust upon an unsuspecting person. For the offer to have legal validity, it must appear to an objective, reasonable person that the offeror actually intended to make an offer.
    •  For an offer to be capable of acceptance, the offer must be communicated to the offeree. It is the offeree who has the power to create a valid contract by making the appropriate acceptance, but that acceptance can occur only if the offeree is aware of the offer.
    •  Four essential elements for definite and certain terms: ◦ The price of the contract ◦ The subject matter of the contract ◦ The parties to the contract ◦ The time of performance for fulfilling the contract
    •  Under the common law, when drafting the provisions of an offer, the offeror must be as specific as possible with respect to price, subject matter, parties, and timing of performance. The law requires that these terms be certain, definite, and capable of being readily understood by a reasonable person. If the offeror indicates terms that are not objectively definite but are vague and ambiguous, the offer will not be considered valid.
    •  The price stated in the contract is an example of contractual consideration. Consideration is the bargain of the contract; it is the benefit conferred or the detriment incurred.
    •  The subject matter of a contract is another example of the consideration for the contract. If one side is providing the price, the other side is usually providing a good or service, such as a textbook or paralegal services, which is that party’s consideration for the contract.
    •  The requirement that the parties be specifically described in the offer generally refers only to the offerees. Usually the identity of the offeror is readily ascertainable because he or she is making the proposal.
    •  Offers are not expected to last indefinitely, nor are contracts intended to be performed forever. Some words of limitation must be expressed by the offeror. Only in this manner can the parties know when the contract is to be fulfilled and, conversely, know when the parties have not lived up to their obligations.
    • The Uniform Commercial Code (UCC) is a model law adopted in whole or in part by each state as a statutory enactment that, among other things, has codified certain contractual concepts with respect to the sale of goods.